Maggie Clemens | Guest Columnist
It is my prediction that 2013 is going to be the “year of the short sale.” And THAT is a good thing! There are several reasons why I believe this:
1. The Lenders. Lenders have embraced short sales quite simply because they make more money in most cases than they would if that same home went through foreclosure. Homes sell at higher prices to the public due to low inventory rather than through foreclosure auctions, which consist mostly of investors. Therefore, most banks and lenders have streamlined their paperwork and procedures so that the whole short sale process is done more efficiently and with less people. Because of this you can expect to see a lot less REO (real estate – or bank – owned) properties on the market in 2013. For lenders/banks this is a good thing to share with your stockholders.
2. The extension of the Mortgage Debt Relief Act of 2007. Yes, it survived the “cliff,” at the last minute. This relieves most homeowners from having to pay taxes on the amount between the mortgage balance and what the home was “short sold” for. This gives homeowners ONE MORE YEAR to make the best of a bad situation, and I believe many will take advantage of it. I DO NOT think that it will be extended after this year. As you are doing your taxes this year, it is a good time to talk this over with your tax advisor. A short sale may be the best option you have right now.
3. Real Estate Agents. As short sales began to steadily increase, real estate agents have had to become well versed in the process for both sides; the listing side and the buyers’ side. The short sale process includes more paperwork, and the knowledge of the lenders criteria and procedures. This is the extra step when you do a short sale on your home, and it is a crucial one. For that reason I always recommend that you work with a FULL TIME real estate agent. You do get what you pay for.
4. The Public Stigma. Let’s face it, we all know one or more people who have either lost their home to foreclosure or sold their home through a short sale. While it used to be one of those deep dark secrets that only the family knows about, that isn’t the case anymore. Unfortunately, short sales and foreclosures have become of a fact of life for many people. The shame and guilt that was once associated is a lot less common, and that’s how it should be. Here’s how I look at it: we as a nation got carried away, we as a nation have suffered from the real estate bubble/bust, and we as a nation are digging our way out. Sometimes wiping the slate clean through a short sale truly is the best solution … and that’s ok.
Those are my reasons for thinking that 2013 will be the year of the short sale. If you have any questions and/or concerns talk to your tax advisor, attorney, or real estate agent.
Maggie Clemens served her customers with distinction for over 25 years in the local auto industry and for the last several years has been a licensed real estate agent with Keller Williams San Diego Metro. She can be reached at email@example.com or at maggieclemens.com.